NHS hospitals reject financial targets and set up clash with regulators

Hospitals were told they would have to eliminate soaring budget deficits by the end of the next financial year

Spending targets demanded of hospitals for 2016/17 are unrealistic, finance directors have warned
Spending targets demanded of hospitals for 2016/17 are unrealistic, finance directors have warned

One in three NHS providers have rejected strict new financial targets for next year, setting up a potential clash with regulators and the Department of Health which could see hospital boards suspended.

Hospitals and other NHS services were told last month they would have to eliminate soaring budget deficits by the end of the next financial year, or forfeit their share of £1.8bn in new funding and risk takeover by regulators.

Chris Hopson, chief executive of the NHS Providers umbrella group, told the Health Service Journal that even those hospitals that would meet regulator’s demands would do so “with conditions, or with a heavy warning around the level of risk that is being run”.

The NHS provider sector in England – which includes hospitals, mental health, community and ambulance services – is anticipating a deficit of well over £2bn by the end of this financial year – meaning that the cost of running services is outstripping Government health funding.

Many finance directors have warned that the new spending targets demanded of hospitals for 2016/17 are unrealistic.

This week it emerged that one hospital finance director has told MPs investigating NHS finances that health service accountants are under pressure to “cook the books” to meet the new targets.

In anonymous evidence to the House of Commons Public Accounts Select Committee, the finance director at an NHS foundation trust warned that patient safety could be put if hospitals cut staff to save money.

A spokesperson for NHS Improvement said: “There is extra funding being pumped into the NHS to help us deal with the financial and operational challenges the service is facing, but providers need to do their bit too.

“We have set them challenging, but achievable targets so we can to get to grips with the short-term financial challenge and help provide the stability the health service needs to bring about meaningful and lasting change for patients.

“A majority of providers have agreed to the new control totals and we are in an intensive period of reviewing and discussing progress with trusts as they finalise their financial plans.”

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